Monday, December 3, 2012

Advent Expectation and the Fiscal Cliff

Advent Expectation and the Fiscal Cliff

By Leslie
Woods

At this time
of year, as we turn our attention to the waiting and the preparation that
characterizes this holy season, and to the hope for the future that will arrive
on Christmas morning, we join with you as we wait and hope. And yet we know that God has called us to be
in the world and to call the world to better account. In the church, and especially during Advent,
we have responsibilities outside of the walls of our houses of worship. We have responsibilities in our families, in
our communities, and in our nation.

Most
pressing among the many items of business before this lame duck Congress is the
looming so-called fiscal cliff – the convergence of a number of policies that
will automatically take effect in January, 2013. In this time of intense partisanship and
long-term fiscal crisis, it is essential that the church’s voice be loud among
those seeking to influence our national decisions. The
nation’s fiscal decisions reflect the collective priorities that share – our commitment
to the common good, our call to be keepers of our brothers and sisters, and our
call to be in solidarity and support of “the least of these.”

We continue to exhort
Members of Congress to bear in mind to common good when making fiscal decisions. We join in concerns about leaving a legacy of
mounting debt to future generations, but so too do we abhor leaving a legacy of
rising poverty, inequality, and under-investment. As the national dialogue centers around ways
to reduce the federal deficit, it is first important to remember what created
our deficit (see chart) and second that there are only two ways to reduce it:
cutting spending and raising tax revenue.
To date, all deficit reduction measures ($1.5 trillion)
have come from spending cuts, mostly from the section of the budget that is not
responsible for our ballooning deficit. We
cannot cut our way out of our deficit – new revenues must be part of any
solution that seeks to reduce the deficit in a just way.

Absent
action from Congress, on January 1st, a series of deep automatic
spending cuts ($1.2 trillion) and the expiration of the 2001 and 2003 tax cuts
will converge to create the so-called fiscal cliff. These policies together will significantly
reduce the deficit, but as blunt tools they will also do harm. Combined with the pending need to increase
the federal debt ceiling again and the expiration of Unemployment Insurance
Benefits for the long-term unemployed, these policies have the potential to cause
severe contraction in the economy and the labor market, even as a sluggish
recovery from the Great Recession continues to provide too few new jobs to meet
the demand of those seeking work.

However, the
current “fiscal cliff” does include some saving grace – the Budget Control Act
which put in place these automatic spending cuts, also known as the
“sequester,” includes specific and explicit protections for many mandatory programs
that serve low-income people, including Food Stamps, Medicaid, SSI, and many
other. In addition, the sequester’s $1.2
trillion in spending cuts will be evenly split between military spending and
non-military spending. So, while the
automatic spending cuts will be severe and promise to be painful for the
recipients of important government programs like WIC and affordable housing,
there is nonetheless some protection built into it. Indeed, Congress
must only agree on an alternative to the current fiscal cliff if the new
solution does a better job of protecting our shared priorities – reducing
poverty and inequality, and making sure there is a strong safety net to catch
people when times are difficult.

On the question of the
expiring tax cuts, it has been clear since the enactment of these policies in
2001 and 2003 that they disproportionately benefit the top of the income
scale. While almost all taxpayers gain
some benefit from these tax cuts, proportionately, the bottom 20% of wage
earners receive only a 3.7% tax cut while the top 20% of wage earners receive a
5.8% tax cut. And when the top of the
income scale is further dis-aggregated the top one percent’s tax cut is 7.2%
(see chart). In truth, there are
numerous proposals to bring in new revenue, many on which the PC(USA) has not
taken a position, including allowing some or all of these tax cuts to
expire. But regardless of the policies
used to achieve the end of increased revenue, it is clear that we must have new
revenue and it is essential that it not be raised from those who are already
struggling.

For slides
from a recent presentation on the fiscal cliff, click here.

Even in this
time of waiting and thanking and hoping and praying, we know that we have so much
work to do, both still to come this year, and as a New Year begins. But we engage with Members of Congress, and
with you, during this Lame Duck season with hope and thanksgiving, trusting in
our God who calls us into the public square, requiring us to bring our
religious understandings of compassion, peace, and justice, to the decisions we
make as a nation.

In the next
few weeks, the Christian community will prepare for the arrival of the Christ
child. The advocacy community will prepare, advocate, and wait for the
resolution of many policies that will affect us for years, perhaps
generations. In the Office of Public
Witness, we are present and we invite you to join us in lifting up our voices.

As the Lame
Duck session continues, we will alert you to other important PC(USA) priorities
that still require action by Congress. So
stay tuned and get ready for a busy season, not one of shopping and
consumption, but of advocacy for that which matters most – a better world, a
hope for the future.

About Me

The Presbyterian Office of Public Witness is the public policy information and advocacy office of the General Assembly of the Presbyterian Church (U.S.A.). Its task is to advocate, and help the church to advocate, the social witness perspectives and policies of the Presbyterian General Assembly. The church has a long history of applying these biblically and theologically-based insights to issues that affect the public — maintaining a public policy ministry in the nation's capital since 1946.
Reformed theology teaches that because a sovereign God is at work in all the world, the church and Christian citizens should be concerned about public policy. In addition, Presbyterian forefather John Calvin wrote, "Civil magistry is a calling not only holy and legitimate, but by far the most sacred and honorable in human life."